The Urban Redevelopment Authority (URA) has added a hotel site to its reserve list. Located in Bukit Chermin in the vicinity of Keppel Club and the Reflections at Keppel Bay project, the site can generate 50-70 hotel rooms. The property had been on the 2008 confirmed list but was placed in the reserved list instead last month.
Though the hotel site has an attractive location, market analysts do not expect to see attractive offers until mid-2009 due to the unhealthy business climate.
Donald Han, managing director of Cushman & Wakefield Singapore, expects construction costs to ease by that time, thus attracting investors to make an offer.
The 60-year-leasehold property will be appraised under a dual-envelope system, with both the land price and concept being taken into consideration. According to Chee Hok, executive vice-president of Jones Lang LaSalle, it is difficult to appraise the Bukit site since the construction project entails substantial costs and prospective investors are likely to seek higher returns due to declining operating margins in the hospitality sector.
Facing the Keppel Harbour, the site is very suitable for a lifestyle hotel. The property can yield 107,639 sq. ft. of maximum gross floor area. The property comprises four antique black-and-white bungalows which are currently leased but will be restored and turned over to the winning bidder.
The property will be approved for bidding once the government receives an application that meets the minimum price. The tender process requires bidders to send bids and concept proposals separately. A concept proposal must be approved first before the accompanying bid can be considered.